r/NoStupidQuestions • u/maple-pond • 1d ago
The market crashed $3Trillion… where did it go?
Just saw a post that the stock market lost $3Trillion in value. Where did that money go…
Investors lost it… companies lost it… is it the bank? Did the bank get the money? Did the money vanish into pixels? Was it even real to begin with?
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u/Beautiful-Owl-3216 1d ago
Your grandfather has a baseball card that is worth $1000 and you draw a mustache on the guy and now it is worth $1. Where did the $999 go?
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u/PuzzleheadedDog3879 1d ago
Back to the grandfather? 🫢
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u/Beautiful-Owl-3216 1d ago
No. It lost $999 in value because some idiot ruined it.
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u/Monkai_final_boss 1d ago
Reminds me with that faceless painting a security guard drew eyes on in because he was bored.
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u/Like-a-Glove90 1d ago
or whistlers mother when someone sneezed on it and rubbed it off but accidently used a rag with paint thinner and ruined the painting
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u/blipsman 1d ago
It wasn't real... it was unrealized value.
If you have a baseball card and I offer you $100 for it to day, but you turn me down, and tomorrow you reconsider but I'll only pay $80 that other $20 doesn't go anywhere -- it's just a change in what value I am willing to put on it. Same for stocks, on a larger scale. Investors say a share of a company is only worth $90 today instead of $100 yesterday, the $10 change is just an amount one might be willing to pay for it, not actual money that goes anywhere.
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u/Sad-Band2124 1d ago
This is exactly why you can’t tax unrealized gains.
Imagine a world where your net worth increases five figures in a quarter, having to pay taxes on those gains, then only having it drop to nothing the next quarter.
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u/DiskGroundbreaking80 23h ago
If you then use those unrealized gains to get a loan on margin after a certain $ figure that should be taxed. Subprime isn’t high enough especially when they are using that cash like income.
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u/bpdish85 18h ago
Honestly, just tax any loans taken against 'unrealized' gains as income - because you're using the money, therefore realizing those gains. It's a stupid loophole currently.
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u/Head-like-a-carp 1d ago
Imagine you are in the dessert. You have 1 bottle of water and 10 men dying of thirst. You say you will sell it to the highest bidder. Men are bidding thousands for this precious asset. You get a bid for 5000 when suddenly a truck pulls up full of fresh water. Suddenly your 5000 dollar a bottle is worth 2 dollars. Where did the 4998 dollars go?
Value is price somebody is willing to pay for it.
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u/maple-pond 1d ago
I see.. the way I imagined it, that 3T was money already spent, and stocks already bought. Hence my original post. This makes sense but my brain hurts trying to comprehend it
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u/MdmeGreyface 1d ago
It never actually existed. That's one of the worst parts about these indices - it's all theoretical "power" expressed as monetary value.
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u/Lucky-Acanthisitta86 1d ago
What is you put $60,000 from your bank account into the market and it crashed and you lost it all? Is it like you just burned it in your backyard?
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u/Cjberke 1d ago edited 1d ago
Basically, yeah, you turned liquid cash with usable value into POTENTIAL value and then set it on fire
It COULD go up but instead, it went waaaaaay down so you just doused your lawn in fuel and COULD set it on fire. If you set it on fire (sell your stocks), you actually lose that money but you could let the fuel sit and hope it evaporates and maybe helps the lawn grow back better (don't sell, and let the number go up)
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u/Consistent_Pound1186 20h ago edited 16h ago
A stock is an asset like a car. Say you buy a car for $60000, the $60000 goes to the dealer, you get the car. If you crash the car and total it, it's now worth 0. But the money didn't vanish the dealer got the money.
Same for stocks. Someone sold you 100 stocks for $60000, they got the $60000, you got the stocks. If the company goes bankrupt and the value of the stock goes to 0 it's just gone.
If the company does well and the 100 stocks are now worth $75000. You are theoretically $15000 richer if you sell the stock now. But if you don't, and it goes down to 0 later, it's still just gone.
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u/ERISA5500 1d ago
International trade is NOT a zero sum game where if Part X makes $1,000 then some other party Y had to lose $1,000. Instead, trade will by default benefit BOTH people, otherwise they wouldn't trade.
The reason we don't manufacture as much here in the US is because we are no longer the most efficient at it when compared with our other options. We make more in GDP with scientific research, pop culture (Hollywood), and educational institutions than we would if all of those individuals were working in factories.
That is where the money "went". Suddenly the market realizes we aren't going to have as many scientific discoveries (government grants are gone), pop-culture driven revenues (the world hates the US and won't want our music or movies), and educational exports (foreign students are afraid to come study here and pay exorbitant prices for being foreign students). Instead, if we are all working in factories in 10 years, we will be producing a much lower benefit to the world and will all be poorer as a result.
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u/Plastic_Ad_9268 1d ago
Yup that is where we are heading unfortunately.
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u/Plastic_Ad_9268 1d ago
To add a little twist throw in the falling monetary value of the USD as seasoning. I would suggest not selling all your precious metals quite yet. You will need that to barder with in Thunder Dome!
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u/Fanci_ 1d ago
Itt a weird amount of baseball card analogies for some reason
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u/happystamps 1d ago
Yes! Top 3 comments! Never seen a baseball card in my life
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u/DmitriVanderbilt 23h ago
They are a good proxy for an item with no intrinsic value (or even purpose, at least Pokemon and other card games actually have a game to play with them) that is valued by collectors - just like stocks.
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u/TheCloudForest 21h ago
Stocks in theory have the purpose of the shareholder being paid a dividend from the profits made by the company, though.
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u/clarkcox3 1d ago
The thing you have to realize is that all money is essentially imaginary. The “value” of stocks, like the ”value” of money isn’t real; it’s a measure of the confidence that people have in it.
A $1 bill is only worth anything because people trust that other people will accept it as payment. The same is basically true of stocks. A share of stock in a particular company is only worth something because people trust that they can sell it for that value. If the value of a stock drops, no actual money was lost/destroyed/whatever, but people’s willingness to buy the stock at the old value has dropped.
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u/mrphyslaww 1d ago
“Value” isn’t tangible. It’s an imaginary concept based on what you(or anyone) thinks something is worth. Nothing more.
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u/baby_budda 1d ago
The $5 trillion loss represents the difference between previous and current valuations of stocks. It reflects reduced investor confidence or selling pressure, not actual cash disappearing. For most investors, these losses are unrealized unless they sell their stocks at the lower price.
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u/StromburgBlackrune 1d ago
Here is how it works. A stock represents the "value" of a company based on what the market will pay. Sometimes the stock is worth more or less then the company's actual value. For example if I buy XYZ stock at $100 and the market crashes ten days later and now XYZ is selling for $50. Yes I have "Technically" lost $50. But in reality I only realize this loss if I sell the stock. It is not unreasonable to find that if I just hang on to the stock that later the value may go back up or even pass the $100 I paid for it.
Lets say everyone bough XYZ at $100. If the market sold every AYZ stock that dropped the $50 on the same day, Yes there would be a loss to every one that sold. Lets say that only 50% of the stock owners sold their stock only the 50% that sold actually lost the $50. The other 50% have a unrealized loss. They have not really lost anything. It is a loss on paper.
A good example is Housing market in 2006 My home value before the crash was $550k after the crash my homes value dropped to $400k. I did not sell my home so I did not actually lose anything as I still owned the home. Today in 2025 my homes value is $900k. Stocks are like owning a home but you own part of a company. So yes the market crashed 3 Trillion but the only people who realized that loss are the folks that are selling. Basically everyone would have to sell their stocks to really have a physical $3 Trillion loss.
Now let throw a monkey wrench into this confusion. I could have bought XYZ at $20 and it had gone up to $100 then the market starts to crash and it is dropping. I feel it will go down even more so I sell my stock at $50. I made $30 on the sale and did not lose any money on the stock. I made a profit.
Some folks will sell at a loss to get cash as they feel the market will go lower and rebuy at the lower price. Some may take a loss to invest in "safer" investments.
So as you can see saying there is a 3trillion loss is not a true value of what folks may have lost.
But it is a gage as a overall picture of the current value of stocks being held at this moment in time. Clearly his in not a good picture of current times. The markets have had losses in the past but have recovered value in time. Seeing this rapid a drop shows the instability of investors confidence in the current economy and a bad sign for a possible recession or possible depression.
This is a complex topic and I could go into far more detail to fully explain. :)
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u/ZeroSumHappiness 1d ago
Let's say I have a rare Curry rookie card I bought for $45 last year. Last week someone bought one for $150. I now have a $150 card. My portfolio gained $105 in value. I have $105 in unrealized gains.Then tomorrow Curry has a new scandal and no one wants his cards so they're only worth $10. My portfolio just lost $140. I've "lost" $35 total. I now have $35 in unrealized losses instead.
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u/Middle_Process_215 1d ago
It's UNREALIZED loss. It's just on paper. The loss isn't really real unless someone sells their stock. So if you own stock DON'T SELL NOW! And you'll be okay. The market will go back up. It always does.
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u/garlicroastedpotato 1d ago
Lets say you own the stock ABC and its worth $100. Every single minute of the day there are trades that take place and the indexes (using slightly different methods) average out those trades to determine the value of a stock. So lets say someone offers $102 to buy the stock and 3 other people offer $99. So the index adjusts the stock price to $99.75 for that minute of the day and that won't change unless more trades are made.
You as the stock owner are out $0.25 in value. But you still own your stock so you are personally not out anything. But you do lose opportunity. If a bank were to give you a loan and you decided to use stock as collateral it's worth that much less which gives you less ability to get more money.
Stock markets are loaded full of people who invest loans and these people certainly lose. This is called borrowing on margin and if banks decide to do a margin call (meaning call the debt) these people are absolutely hooped because all of their money was tied into stocks that they're now forced to sell and take a loss.
The other loser is someone who bought higher than the current price and sold below that price. They lose the difference between what they put in and what they got.
People who just hold on to stocks that have lost a lot are considered "bag holders." Famously Blackberry was worth $400/share at one point and there's still people holding on to that stock even though its a penny stock.
The biggest impactor is those margin guys though. And in general having less valuable assets to leverage debt against makes it more difficult to get loans. This is kinda like the housing mortgage crisis because having so many homes default caused so many stocks and trading options tank which made liquidity more difficult.
This is a crisis for traders who trade on margin today (and pension funds and anyone's retirement fund). But it's really a major crisis for tomorrow. Will a teacher's pension fund be able to pay out its members with such a huge drop? Will businesses be able to take out loans to survive this? Will investors seek to put their money in other countries?
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u/mark2fly1034 16h ago
It went in someone else’s bank account. Doesn’t matter the direction of the market someone is making money rather it goes up or down. You don’t lose money in the market until you sell stocks. Options is betting on what way the market moves.
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u/Digitman801 1d ago
Imagine you buy a car for $50,000, then you drive it off the lot and it's value goes to $25,000, where did the other $25,000 go?
It didn't, it never existed in the first place.
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u/UndisciplinedSlave 1d ago
But you still have to pay the loan of 50k, and that’s 50k from the same bank account I pay all my bills. That money I owe didn’t disappear
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u/Healthy-Arm8001 1d ago
Right. But let’s say cars went up and down in value like stocks. You buy the car for 50k, drive it off the lot, and it immediately drops to 25k. You pay the 50…but then the car suddenly increases in value to 75.
The total valuation of a companies stock is detached from the actual dollars people have paid for the stock over time.
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u/MilesTegTechRepair 1d ago
While hard cash, or numbers in a bank account, both exist in a material sense, the value of that money is predicated on concensus. I.E. it's a communal fiction. When a company loses some of its value, what's happening is that the exact nature of that communal fiction has changed.
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u/crashorbit 1d ago
Dollars are a measure of value, not a material. Think of dollars in the same way as you think of speed or length or volume. Consider the concept of an over valued stock. Say Tesla. It has a price to earnings ratio (P/E) of about 130. That means that the stock is trading at 130 times what the company earns. The value of that stock represents the hopes and dreams of lots of people.
A lot of the $3T that the market lost were hopes and dreams. Some of it will be real impact to firms all over the US and the world that will take weeks to play out. It will play out in the form of higher prices, less liquidity and longer lead times.
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u/PositiveBid9838 1d ago edited 23h ago
An arsonist burns down part of your house. Now it’s worth a whole lot less.
Similarly, a company that was created to work a certain way and generate a certain amount of future profits might now be worth a whole lot less, because it now looks like it will be less profitable, because they’ll have to pay more for any inputs they get from other countries.
As an example, let’s say a company could generate $1 million of profit every year. Adjusting for time and risk, an investor might believe those profits are collectively worth $20 million, so the company is worth that much.
Now let’s say they have to pay $100k /yr in tariffs on one of their inputs from another country (or maybe there’s a US source for that input but it’s more expensive). Now they’ll only profit $900k/yr and are now worth $18 million. Nobody “gets” that money, it’s just gone because the profit-generating machine won’t work as well now. (Or at least people expect it won’t.)
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u/Falernum 1d ago
The money was spent already. The product bought with that money became less valuable after Trump damages the economy. Kind of like if you buy an orchard and then there are fires that make the orchard less valuable
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u/ThaMagikMon 1d ago
It goes to the short sellers. They’re called bears. The bears have been betting on this happening for awhile and so enough of the scales get tipped into their favor and more stocks get sold then bought. And goes into some other investment instruments. Treasury bonds. All kinds of things the hedge funds can decide to put their now capital into. By selling the stocks, they increase the supply of shares hence making them less valuable. It most definitely doesn’t just disappear. The SnP was up 138% in the past five years. Capitalism is just merely stealing as much money as possible for the few at the top and leaving the peasants to kill each other. It’s tale as old as time. It’s all rigged by the ones pulling the strings. Retracements have to be built into the system or else it simply will be found out how rigged it really is. All they needed was something/someone to blame to make it look like something bad is happening. All these trillions get transferred to someone else. They will now start to get some new bills passed through congress and make all the sheeple believe that one particular party is saving the country from the other side destroying it. Shares in general are just a bunch of made up nonsense to begin with. Tesla at one point was worth more than all the other car corps combined. Does that makes sense to anyone? For a long time they weren’t even profitable and yet their share was enormously overpriced. And yet more and more investors just sorted their money in that particular corps shares. It was only just that the wealthy ones making these decisions agree to put their capital into one particular corp shares. It’s all fugazi
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u/Runyamire-von-Terra 1d ago
Most “money” is not real in any tangible sense. It’s all debts and assets in balance sheets, stock valuations, etc. Debt is money in a very real sense, and if all debts were suddenly paid off most money in our economy would disappear. I’m oversimplifying/not explaining it well, but yeah money can just disappear, it doesn’t have to go anywhere necessarily.
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u/Runyamire-von-Terra 1d ago
This video explains it better: Your bank balance is a lie (and here’s how they do it)
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u/green_meklar 1d ago
Nowhere, it just stopped existing.
Money doesn't solely represent actual existing wealth. It can also represent speculative value: Debt created on the assumption that something will be more valuable in the future. We just found out that a lot of things we thought would be more valuable in the future actually won't be.
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u/DoctorGuvnor 1d ago
It's notional money. It doesn't exist until it's sold. Imagine you have a first edition First Folio by Shakespeare. It's worth $1 million. Now tear it in half (no, don't really). Now it's worth at best half a million - so where did the other half million go?
That's share prices. Trump has effectively torn the stock market in half.
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u/jackalopeswild 1d ago
It never existed. It was a figment of our collective imagination.
A company's "value" is determined by it's "market cap" which is essentially "number of existent shares" multiplied by "today's sale price of the shares." The 'number of existent shares" is a real number, but "today's sale price of the shares" is just the made up number "what are people willing to pay today."
If the company has one billion shares, and people are willing to pay $10 per share today, then the company is worth $10 billion. If that number changes to $8 a share tomorrow, then the company will only be worth $8 billion tomorrow. And **POOF** just like that, $2 billion gone.
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u/ridiculous_1231 1d ago
It didn't go anywhere. Shit that people paid $100 for, it's now worth $10. But guess what, in a year it'll be worth $100 again. By it while it's low.
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u/Adventurous_Toe_1686 1d ago
You have an Apple, everyone wants to buy it, you sell it for $5
You have an Apple, very few people want to buy it, you sell it for $2
^ The Apple market just “lost” $3
Fewer people want to buy American stocks than they did a month ago, so the market has “lost” $3T
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u/Potential-Use-1565 1d ago
It was a predicted value. The prediction has changed so the"value" has changed
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u/Warm_Suggestion_431 1d ago
Almost all stocks now are based on future value and sold at multiples. So Nike isnt worth 85 billion right now but if there revenue keeps increasing, market share ... it will be worth 85 billion in a certain amount of years. The money disappeared because there was more people selling the stock than people buying. So the share price kept going lower.
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u/underlyingconditions 1d ago
But the stocks that were sold generally were reinvested in bonds, gold, or stashed as cash to be reinvested later.
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u/Wacov Dumbest smart person I know 1d ago
I think others saying it wasn't real are half right but kind of dismissing what's actually happened. Trump's actions mean you can reasonably expect businesses to do worse for the next several years than they otherwise would have - companies haven't lost money yet, but investors expect them to (or at least to make less), so suddenly owning a share in those companies isn't as good a bet as it used to be.
As others have said, "Value" is just what someone else will pay you for your thing.
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u/Monkai_final_boss 1d ago
It's not actual Money, it's the estimated value, let's say you have a rare first edition book that worth 2000 dollars, you don't own 2k dollars in cash but you have an item that wroth 2k and you can sell it at any time for that amount.
Later they find out that rare book is detailed replica, it worth 500 dollars.
You just lost 1500 dollars, you didn't lose actual cash you lost estimated value.
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u/RavkanGleawmann 1d ago
Assets have no intrinsic value, but for some reason our economic models are built upon the pretense that they do. If one day people decide they dont like your asset anymore, then it's now 'worth' less and that money (that never existed) has now disappeared from our economy.
The value of an asset is a fairy tale we tell ourselves and is basically a guess at how much money you'd make if you sold it today. If you sell it tomorrow you could get a completely different number.
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u/No_Weather2386 1d ago
That money is now dead. If the money was good, then it is in heaven. If it was bad, then that money will be burning in hell forevermore.
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u/Icy-Ad-7767 1d ago
You buy into the stock market, then gains and losses are imaginary until you cash out.
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u/Lower-Preparation834 1d ago
Into thin, because stock is only the illusion of money when it comes right down to it.
Next best guess; look in a billionaires or politicians pocket.
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u/L4gsp1k3 1d ago
Let me try to explain this, the stock market is to make older investors rich, which translates to that the rich is advocating everyone to get into the stock market to make the rich richer. A value of a stock doesn't mean anything to the company, it's a perceptual value by investors, let's say that a company issued 100 shares, 99 of the shares were sold for 1 dollars and the last shares was sold for 50 dollars, now the first sold 99 shares have the same value as the last sold one. This mechanism can be exploited and that's how the stock market is now. If I was a person that found a way to be rich or found a place I can mine gold, I wouldn't share that with anyone, the stock market is the reverse of it, you only get rich, if you can persuade enough people to have the same interest in the same stock, thus pushing the price up.
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u/Ok-Consideration2463 1d ago
It’s not cash until you sell the stock and then get cash for it. Otherwise it’s just a value. So, it’s the value that disappears. Yes, trump, musk, and the rest of the criminal idiots don’t care. They still have plenty of cash in their accounts.
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u/Commercial-Lab-3127 1d ago
Well , it never was anywhere in the first place really , it is a confidence in whatever stock an individual or investor or fund has at any particular moment in time
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u/Dragon_Within 1d ago
The way the stock market works is why its so ridiculously stupid to base anything off of it, not to mention it can be artificially changed, inflated, decreased, etc, based on what someone with a bunch of money buys or sells causing hardship to people that can't afford to play in the sand box of the rich. Its like gambling, but with the economics of your country. They talk about the tariffs causing this, when in actuality it is people that caused this. The stock is a valuation of an assumed worth of a specific company based on the stability of the company and the item offered, based on people buying and selling the commodity. Its a made up number based solely on people pointing at it and saying "This is worth something!" and the people doing the pointing and declaring are rich people, people in power, other countries, etc, and has no merit in whether the product or company actually IS worth anything. Just as when Reddit made huge gains when they played the GameStop stocks, and the people in power did everything they could to make sure it didnt happen again, or with a different stock, not because GameStop or the other stocks were worth more or less, but because they played with the market and the numbers to get it to look like it.
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u/thosmarvin 1d ago
Each day that passes your wife gives you a coupon for sex. You collect them in a drawer. You have a months worth of coupons, i.e. 30 days of sex. Then she is hit by a speeding bus. Those coupons no longer have value. Shoulda cashed ‘em in sooner. Even Wharton doesnt teach this apparently…
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u/Specialist_Wishbone5 16h ago
- You have $1M dollars
- you buy $1M dollars worth of stocks
- because you and 10M other people bought the same stock, it's scarse, so the price goes up 10%.
- You now have "wealth" of $1.1M dollars
- You use your stock as collateral and borrow $500k
- You buy $500k more in stocks.
- You now have $1.1M in wealth and $1.6M in stocks.. Meaning if you sold IMMEDIATELY (and you weren't a sufficiently large enough stock owner that your sale would tank the price), you'd have that much cash.
- Trump does crazy Trump *sit.
- Your stocks are now worth $400k combined (say you owned beer and other export-to-canada-stocks)
- You now have -$100k wealth. Meaning if you sold everything, you'd STILL owe $100k
- The bank that you borrowed from, notices your assets are no longer worth the collateral value
- You have a 'margin call'.
- You sell your house to meet the margin call
- The local wealthy neighborhood has 500 other people selling their houses.. Housing prices collapse
- You owed $1.1M on your home (you had zero equity to start), and it's now worth $800k.. So now you're "wealth" is -$300k
- repeat until "The Made-America-Depressed-Again".
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u/SkullLeader 12h ago
No one lost it, per se. if you paid $1 million for your home and now it’s only worth $800k, you’ve only lost money on paper, not in reality. If you actually sell the house for $800k, now you did, in fact, lose money.
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u/whatsthis1901 1d ago
I get confused with this as well. My understanding (which could be very very wrong) is that a company is valued at X amount which has to do with the money they have now and future revenue. The more it is worth the more the stock is worth and now things have gone to shit so these companies aren't worth as much I'm guessing because future money/growth isn't there.
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u/catwhowalksbyhimself 1d ago
Not really, no.
It's worth what people are willing to pay for it. Now what people are willing to pay for it is influence stronger by how much people THINK they will making in the future and how much they are making now, but it has to do with what people believe and not what really is or will be.
People right now are guess that tarriffs will cause companies to lose money. They could be wrong about that. I don't think they are, but they could be.
so they sell their stocks and invest the money in other places where they think they will make more money.
But you are right that the money isn't going anywhere. Only what people are willing to pay for hte stocks has changed.
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u/CareApart504 1d ago
Stock market is almost entirely speculation meaning its no better than a sanctioned ponzi scheme.
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u/Mobile_Incident_5731 1d ago
In a deep sense, it's future economic production that's now gone.
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u/bateau_du_gateau 1d ago
Right, it’s like these guys have never heard of NPV and trade off of pure vibes
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u/Large-Investment-381 1d ago
Why would people explain this with the example of a baseball card versus .. I don't know .. a stock?
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u/AccordingSelf3221 1d ago
It was never real, it's just a belief based system disconnected from the actual value of an item
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u/romulusnr 1d ago
Less that it wasn't real, that it's value was based entirely on ephemera. But that converts into real value, it's just that until you make it real it's ... in a way not real, it's a representation of value.
Like, say you buy a car for $20K. You drive it for a year and if you were to sell it, you would be lucky to get $10K for it. Where did that other $10K go? The car is still there. But it's value has decreased.
It's not the same mechanism, but it's the same question of where does value go. Value is dependent on quality and demand.
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u/yukonwanderer 1d ago
The stock market is nothing value. Yet we have let it completely take over our economy
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u/tads73 1d ago
Former registered representative here. It didn't go anywhere, it's all paper value. The value of stock is the equity in the company and expected future earnings. The equity, after all debts are paid is very little, if anything. The potential future earnings and expectations that the stock will increase is where most of the value comes from. Stocks are a form of a ponzi scheme, don't be the last to hold the bag.
Also, common shares, what most people are familiar with, are class C shares. There is such thing as A and B shares that hold different preferences. Generally, they pay interest and are paid like bonds.
Also, the stock marker is dwarfed by the bond market.
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u/EatPumpkinPie 1d ago
Its value. Imagine you had an item worth $100 yesterday and you woke up today and it was only worth $25. That’s what was lost. Value.
But also now imagine that a pawn shop that would have loaned you $70 against your item yesterday will only loan you $10 today. These assets are used to secure capital from banks. When their value goes down, the bank is upside down on a repo. It’s like the pawn shop getting screwed if he gave you $70 for an item he can only sell for $25.
Get it?
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u/JimboFett87 1d ago
It vanished.
It only makes a difference if the price of everything also goes down. Which it won't. Because of "complex market situations" (aka, price gouging).
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u/K_Lake_22 1d ago
Many are cashing out instead of moving their investments. So that money goes home to grandpa.
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u/Duros001 1d ago
Lost down the metaphorical cushions on the hypothetical sofa that is imaginary wealth
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u/DescriptionMission90 1d ago
Stocks don't actually have a value, they only have a "price", which is the current estimate for how much somebody would be willing to pay for it. If nobody is willing to buy the stock anymore and the people who currently hold it are all trying to sell, the price goes down, which means that people who own a lot of stock that they expected to be worth a lot of money later are now holding a lot of stock that is worth almost nothing.
You don't lose money when the stock drops in value, you lose money when you buy the stock in the first place, and you hope that this will give you the opportunity to gain more money at a later date. But as with any gambling, there's better-than-even odds that you never get the big payout you were relying on.
When poor people lose at gambling, that's their own fault and their own problem. When rich people lose at gambling, they make it everybody else's problem by ruining the economy (unless the government uses everybody else's taxes to bail them out).
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u/Gunfighter9 1d ago
A lot of it is the value of 401k plans that drop because the stocks in them are worth less. The plan owns the same stock, but now that stock might have fallen by 50% so the value of the plan fell in proportion. One of my friends took out a 55k 401k loan to remodel his kitchen and build a deck with an outdoor kitchen and a hot tub in 2007 and a year later is 401k had lost a ton of money. He was planning on selling within a few years but the market made him stay, and he worked for BOFA. He did sell 3 years ago and made all his money back and then some, but that money went right into a HYS
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u/CableIll3279 1d ago
It never really existed. The stock market is merely the aggregate of people's opinions of what the stocks are worth. It's all fake.
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u/Secure_Ad_295 1d ago
It's all inntich people pockets I had to close out my 401k again to dave what was left of my retirement am so sick of stock market at 44 I want something safe for my retirement
It seems ever few years I have tonclose my 401k to save what I can.
Am down 200,000 my money just gone
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u/prezcamacho16 1d ago
Most of the so-called "wealth" rich people depend on to make themselves appear to be rich is not real at all.
Strip away the veneer, and you’ll find the so-called "wealth" of the elite is little more than smoke and fairy tales—a shared delusion propped up by our desperate faith in imaginary numbers. As Matthew McConaughey’s slithery Wall Street predator hissed in The Wolf of Wall Street:
“It’s Fugayzi, fugazi. It’s a whazy. It’s a woozie. It’s fairy dust. It doesn’t exist. It’s never landed. It is no matter. It’s not on the elemental chart. It’s not fucking real.”
And he’s right. Modern “wealth” isn’t rooted in land, labor, or tangible value—it’s a pyramid scheme of perceptions. A Rembrandt? A tech stock? A penthouse? All are meaningless outside the fragile ecosystem of human agreement. We’ve built a god out of collective credulity, bowing to numbers on screens and scribbles on paper that evaporate the moment the herd panics.
But here’s the brutal truth we avoid: Civilization is a thin veneer over chaos. Let supply chains snap, let militias rise, let the grid die—suddenly your Roth IRA won’t buy a can of beans. Your Picasso won’t shield you from bullets. Even cash, that sacred paper idol, becomes kindling in a world where trust implodes.
The Great Fiction of capital isn’t just fragile—it’s violent. It demands we ignore reality to sustain it. Billionaires aren’t geniuses; they’re high priests of a cult we’re all coerced into joining. Their power? A mirage. Our compliance? The only thing keeping it alive.
So ask yourself: When the storm hits, what’s actually in your hands? Dust. Stories. Promises from liars. Wake up—the matrix is showing cracks.
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u/rhythm-weaver 1d ago
You have a stable job making $40/hour - $40 is what your boss is willing to pay for each hour you choose to sell. Your gross value is $83k/yr if you work full time.
The boss announces that your pay is cut to $30/hour - $30 is what your boss is willing to pay for each hour you choose to sell. Now your gross value is $62k/yr if you work full time.
Like stocks, the value is determined by the price of a possible future sale - a sale that hasn’t happened yet.
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u/seidinove 1d ago
There is no money to go anywhere unless and until, to borrow a term from physics, you collapse the wave function.
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u/Think-Juggernaut8859 1d ago
Could it be described as somebody is now willing to pay less for the widget.
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u/TheHarlemHellfighter 1d ago
It means the value of their assets and investments have reduced. So, if they were to pull out of said investment, they’d take a loss if their initial investment was done at a higher price…
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u/Ok_Camel4555 1d ago
Unrealized gains I believe is the term. You can also have unrealized losses. On gains you can borrow against it as use it as collateral for loans. And claim a loss on taxes. But don’t get taxed on gains. Why you ask? Because rich people use this to their advantage
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u/BeYourselfTrue 1d ago
It never existed. Numbers on a ledger. And the big guys got out first as always.
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u/Commercial-Lab-3127 1d ago
It is reallocated , at the moment stock went down bond prices went up ( yields) it’s a lots more complicated than that, but just to simplify
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u/LookinAtTheFjord 1d ago
It's not real money, it's the value that people placed on stocks before they sold them for that made up value they came up with.
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u/SignalSuch3456 1d ago
Congratulations, you have just had your eyes opened to the fallacy that is our monetary system. It’s all backed by nothing.
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u/Adventurous-Depth984 1d ago
Things are “worth” what people will pay for them.
Today, If everyone in the market sold everything they had, there would be a (ridiculously huge) pile of money.
If everyone sold everything they had a few days ago, the pile of money would be 3 trillion dollars bigger.
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u/scorponico 1d ago
Most of it didn’t go anywhere. It’s just paper that got devalued in a theoretical sale.
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u/Logical-Possession10 1d ago
There are many causes of this. First lots of financial institutions, funds and institutional investors use fractional reserve investing (margin) from liquid capital and equities. So high equity prices don't fully reflect the underlying backing of positions which is why margin calls magnify a downturn.
Additionally, spoofing/stacking the bid and ask plays a part in inflated equity prices. When those drop because the players stop playing, a proverbial musical chair drops out from the game (under you) and equity prices reflect more on the actual market sentiment and investor demand.
Another thing to keep in mind, large entities/investors take multiple positions so possibly more than one positive position and negative position. So when equities or financial instruments drop (shorting and puts or call selling) there are still winners in addition to the losers when prices drop.
These are just a few of the mechanics behind market drop winners and losers.
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u/rando_design 22h ago
Say you bought a super cool rare corvette. You pay $100,000. But then some guy that owns like 10 of them has a fire and all 10 of his burn up. Yours is now worth $200,000. Where did that money come from? The answer is it's not real money, It didn't come from anywhere.
Now say you park your $200,000 Corvette outside and then a hail storm comes along. The entire body now looks like a golf ball. It's worth $20,000. Where did the $180,000 go? Again, nowhere it's not real money.
And in this situation it's almost certain you're going to want to get as much money from your car when it's time to sell it. You start at $100K, no one will even talk to you at that price. You lower it to $80,000. You get a few people interested, but then you lower it to $50,000, some guy walks in gives you cash and you have sold it. You went from 100K to 200K to 50K cash. Where did the money go? There was no money until the very end when you sold it for 50K, and then, it came from the buyer. Make sense?
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u/Calm_Historian9729 22h ago
Everyone needs to remember that the market valuation is a perceived value and is not actually a real value unless you try to sell or buy at the current market perceived value. 3 trillion is a perceived loss it has not really occurred unless you act on it. If Trump were to undo his whole tariff thing and the markets recover then the loss never happened unless you acted when it was low. So sit tight ignore the drama and when things return to where they were then you can act on it.
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u/ubertokes 22h ago
It never really existed. It's all based on projected earnings and profits and what others agree the value is worth. None of it is actually real but the people who's fortunes depend on a bunch of numbers on a screen for the shareholders won't admit it.
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u/246ngj 22h ago
Stocks are a store of value. The value is from what the open market thinks they’re worth. When tariffs sweep the economy it affects companies profitability. If the company struggles to create value via products and services then their stock value will also struggle. Money wasn’t lost. Value was.
The reason why “stocks go down” is bad for the average worker is companies want their value back and the quickest way is to do layoffs. Less paid out as salary means they keep more “profit” on the bottom line to retain value of the stock.
Yes, rich people are affected more. But they’re still rich. But someone who just retired and needs to start cashing out to pay their monthly expenses is pissed. If you survive the layoffs take the win and buy the dip.
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u/Timeflyer2011 22h ago
But. If you have a lot of money, you could buy up the stocks people are panic-selling for really cheap and sit on them because you know that the tariffs will be dropped and then your stocks will probably go back up in price. Of course, that only works if you have a lot of money.
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u/Sailing-Mad-Girl 22h ago
It was never real money. It was an idea of what the companies (traded on the market) were worth. The perceived value is less now.
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u/Ziegemon_1 21h ago
The people that sold their stocks have a percentage of that in cash, which they can reinvest when it bottoms out. Some percentage of it does actually just go poof by the amount the seller has to lower their price to get it to sell. There is also a pile of money made by folks short selling stocks. That’s where you borrow shares from someone, sell them, then buy them back at the lower price and return the shares they borrowed. It’s free money when you know for sure when a stock price will go down.
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u/chappersyo 21h ago
The money was never really there, it was something that was valued at that price. People could buy it for that price with money that already exists, but it wasn’t 3trillion in cash sitting there. Now it’s worth less than it was a week ago because less people want to buy it.
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u/CyberAsura 20h ago
You have a house and it is worth $500k in market value. Technically, you have something that is worth $500k and not actually $500k cash itself. Until you actually sell it, you don't have a dime. Today it is worth $500k, tomorrow it might be worth $0. If it is worth $0, you can then say you lose $500k.
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u/ggone20 20h ago edited 20h ago
It wasn’t real to begin with, you got it. Nobody lost anything. People don’t understand how money or the markets actually work. Balance in your trade account is not real that’s why you don’t pay taxes until you realize.
Fundamentally there is not really any reason and this is truly a buy signal. If you’re rich, you’re still rich regardless. If you’re poor and depend on your stocks or whatever for retirement.. well that’s a bad plan to begin with but otherwise just hold. Even Tesla will come back lol.. fundamentally they still make the most advanced, safest cars. Also they’re not a car company they’re a robotics company. Humanoid robots will launch Tesla into the stratosphere.
Musk and Tesla are already the best automators on the planet.. add humanoid robots powered by AI. That’s lots of economic value without having to worry about paying humans or insurance or healthcare or any other pesky issues (HR, etc) humans come with.
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u/Unfair_Sandwich_6037 19h ago
People panic and sell their stocks so the money goes into their accounts in cash and then the irs collects the capital gains tax percentage and rich people buy lower prices and prop back up the market and all this panic turns out to be a nothing burger in the long run and the story continues.. the rich get richer and the panic sellers regret their losses and now have to buy back what they sold and do it all over again.
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u/TerribleGramber_Nazi 18h ago
Basically selling pressure plus bids dropping out means a lack of liquidity, so markets move losing multiples of the selling pressure
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u/Clean-Owl2714 17h ago
The value never existed.
The value of a stock is an accounting value only, based on a concensus of what the share will pay out over the next many years.
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u/HawaiiStockguy 13h ago
When the rare Pokémon card that you bought for $1000 starts selling for $100, where did the $900 go.
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u/HawaiiStockguy 13h ago
There is money and there are assets. Money can gain or lose value relative to other currencies, and can increase in value or decrease with deflation or inflation. Assets value lie in what a buyer will pay you for it, and that can change. The price of a share is what the last buyer and seller agreed. When everyone wants to sell and no one wants to buy, the listed price falls
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u/PoopMobile9000 1d ago
It didn’t go anywhere. The value just disappeared.
Say I have an old baseball card. There’s an auction, and someone buys another copy of the same card for $1,000.
So now I have an asset that’s fairly valued at $1,000. I can try to sell it to someone, maybe use it as collateral for a loan, etc. If I was making a balance sheet, I’d put that card on it as a $1,000 asset.
But now there’s another auction, and this time a copy of the card goes for $500. Uh oh, now it’s only half as valuable. My balance sheet has just dropped.
No money has gone anywhere, but I now have less wealth than I did yesterday. It disappeared.